Feb[5] - Venture (steady result attracting strong interest)

COUNTER: Venture Corporation Limited

OVERVIEW:
Venture is a global provider of Electronics Manufacturing Services (EMS) for a wide range of high-mix, high-value and complex electronics products, such as photonics system, electron mechanical printing devices, Post of Sales (POS) machines, handheld devices, etc. Headquartered in Singapore, Venture comprises about 40 companies with global clusters in Asia, US and Europe. It is strategic partner of choice over 100 global companies including Fortune 500 corporations, such as HP, Honeywell, etc.

HIGHLIGHTS:
[1] The group saw its 4Q15 revenue and net profit up 3% and 14% to S$694m and $48m year on year. Full year 2015 saw net profit up 10% year on year on year. By end of 2015, it registered net cash position at $324m.

[2] Contribution from printing & imaging segment shrank, but other segments have been growing steadily. Test & Measurement/Medical & Life Science is the bright spot which registered 15% growth.

[3] It has announced dividend at 0.5 per share with EX on 5 May. It translates to dividend at 6% as of last closing price.

PRICE TREND:
Price has broken resistance ~8.1 decisively on last trading day following the announcement of its FY2015 results. Volume is significant, and EMA10 & EMA are both pointing upwards. Strong resistance is ~8.6.

INVESTMENT THEMES:
[1] About 60% of Venture's shipments are to US. Considering USD being strengthened along with rising interest rate, the currency movement will be benefit to the counter. Less than 15% of shipment is derived from Singapore. Thus, it is less vulnerable the falling export index in domestic context.

[2] Almost 60% of staff cost are incurred in Malaysia. Weakening MYR vs US and SGD translates to heavy reduction in cost for the counter.

[3] Investor can accumulate into the cash generating counter for its strong cash position and steady business execution.

[4] Trader could position for the potential uptrend in forming as the potential loss is well covered by dividend ~0.5. Shall history on price movement on Feb 2015 repeats, 8.6 shall be the exit target.

*** Note: Same counter has been mentioned in Feb[5] @ 2016 ***